Red 5 has reached an agreement with Terrain Minerals to acquire the Great Western gold deposit in Western Australia for $2.5 million.
The acquisition cost equates to $40 per resource ounce, with a $300,000 in an up-front cash payment provided by Red 5 in November 2019, plus the issue of $2.2 million worth of Red 5 shares.
The deal is part of Red 5’s plan to grow its mineral resource base to feed the Darlot gold processing plant.
Red 5 managing director Mark Williams said the Great Western gold deposit was a strategic acquisition for the plant.
“Having completed the due diligence drilling, we believe the Great Western deposit represents a highly prospective addition to our Darlot mining hub Strategy, with an existing 62,000 ounces mineral resource and exploration upside, particularly at depth,” he said.
“We will continue to seek further such opportunities – both through our exploration programs as well as through strategic acquisitions – with the aim of establishing five to ten years of ore reserves either at or within trucking distance of the Darlot mill as part of the company’s Darlot mining hub strategy.”
Three significant reverse circulation drilling intercepts were made by Red 5 at the Great Western site, including nine metres at 3.3. grams per tonne of gold; 14 metres at 2.5 grams per tonne of gold; 20 metres at 6.1 grams per tonne of gold.
Assays are also pending for four diamond drilling holes, with observations already confirming the nature of the mineralisation.
The deposit is 80 kilometres from Red 5’s Darlot gold mining and processing operations.
Terrain Minerals stated the funds would allow it to advance works at the Wild-Viper and Smokebush gold projects in Western Australia.